HelloIf I have understand this right, many here seems to take for sure that they will get bonus wage, that's seems to be very normal. But, if you know that you will get a bonus, is that really a bonus then?And how can you be guaranteed a bonus in your contract? What "bonus system" do your company have? When, on the year, do you get your bonus?You say that the first year, you will get like 50% bonus (or something like that, depends on who you ask), but if you do a better job than those who have worked at the company for 10 years or something, won't you get more bonus than they get, then? /John G

QuoteOriginally posted by: amerikan if you do a better job than those who have worked at the company for 10 years or something, won't you get more bonus than they get, then?Unfortunately not necessarily... I can only suspect that I have been there.

Although usually contracted as discretionary, if you're valued highly enough you'll be paid no matter what the general market conditions, maybe not as much as if the market was booming but you'll still be paid. Most IBs know who they can afford not to pay and who they can't, and usually the employees know into which catagory they fall too.

The "guarantee" in a bonus is often bracketed with get out clauses like "subject to adequate performance".However, a factor missing from this conversation is that a large % of bonus is not for what you have done, but your value to your manager next year.Maybe your value to the firm contributes, but don't bet on it.The process for bonus varies, and is opaque even if like me you are a student of the topic with input from multiple sources.However, it is worth also plugging in that if people got the bonus they deserve, then I'd have to get a proper job Partly this is noise in the manager's measurement of your value, but also because he typically has to justify it, and has to do a complex balancing act with other members of the team.Some firms, typically banks who at their heart still think of themselves as "retail" in their investment banking operations have bizarre rules on how bonuses may be allocated.Sometimes this is caps, sometimes it is a rule that fixed components of package cannot be >X.The official P&D model for this bonus season divides the world into three types.1: People who seem themselves as lucky to have a job. Their bonus will not be great. Credit is the obvious example, but other parts like sales and prime brokerage, seem to be hit.2: People in risk, IT, HR, product control etc whose bonus is some function of the health of the company and some random noise from their manager.3: the third type divides into two. Type 3 people work in business areas unaffected by the shit this summer. FX and Commodities for instance or prop trading units whose strategies happened to prosper in these conditions.Type 3A people will get a much greater bonus if they have done well, but...A lot of people will be type 3B, in that they work for business units without the political power to stop their bonus pool being used to prop up the bonus pools of more politically adept units.This is consistent with mwam's view, in that to pay those who are perceived to have longer term value for the bank, you have to raid the BPs of more currently successful units.This may appear to be a rational, if unfair process, but recall that power in the bank in underwritten by earnings, so there is inherently a lag. When Credit was on the irse, bonuses were held down to subsidise fixed income, or even cash equity traders. Now that we are in a world where Credit has been successful, they will defend their patch against (say) commodities.Thus we are going to see egregious mispricing in the market, a condition that will persist for some time due the lower ability of firms to exploit the arbitrage in this part of the labour markets.We've already started talking to people who see themselves as 3Bs.

Thank you for your answers. Except of the bonuses, are their (usually) any benefits too, like health care or something like that? Maybe the first year you should try to just be happy that you have a job, and then the second one begin to ask for more bonuses and stuff?This is OT, but what will a quant earn when he is 64? I've heard a lot about what he/she will earn the first five years, but what will the wage be in the end of his career?/John

QuoteOriginally posted by: amerikanbut what will a quant earn when he is 64?yeah, and while we're forcasting, where will the FTSE be in 30 years time?

What do you mean? you mean that there are no old quants? Okey, Quantitative finance is a pretty new science, but not that new I wasn't talking about how high the wages will be when I, or anyone else at this forum, is 64, I was just talking about how high they are right now.

A 64 year old quant?

i just meant that you can't forcast anything that far out, it's just silly. at that scale your career will depend mainly on what you really want to do long term and how good you are at achieving it.there is no canonical example of a 35/40yrs experience quant job, unlike at entry level, so even if you had data on what people get paid (and it would be sparse) you can't infer anything from it. you also would have to contend with survivorship bias and all sorts of other effects; it's just a daft question.

QuoteOriginally posted by: amerikanWhat do you mean? you mean that there are no old quants? Okey, Quantitative finance is a pretty new science, but not that new I wasn't talking about how high the wages will be when I, or anyone else at this forum, is 64, I was just talking about how high they are right now.When you are 64 you will have other things on your mind 64

QuoteOriginally posted by: amerikanIf I have understand this right, many here seems to take for sure that they will get bonus wage, that's seems to be very normal. But, if you know that you will get a bonus, is that really a bonus then?Salaries are stable from one year to the next, and even in really bad times, people don't get salaries cut. Bonuses change from year to year depending not only on individual performance, but also the state of the financial industry. One thing that is near universal is that bonuses depend on the performance of your group along with your individual performance, and that the also depend on peer reviews. This means that everyone tries very hard to be nice to each other.QuoteAnd how can you be guaranteed a bonus in your contract?It's not a contract. It's a offer letter. People who are not senior managers don't work under contract in the United States.You can be, but usually what happens is that the company will give you a signing bonus, which you have to return if you leave within a certain time, usually one year. This doesn't mean much because if another company wants to hire you, they'll usually cover the bonus you have to return. The only case I know of where it is likely that a company will guarantee a year end bonus is if they want someone to move near the end of the year, and so they will guarantee a bonus to cover the one that the candidate would have gotten if they stayed at the old company.QuoteWhat "bonus system" do your company have? When, on the year, do you get your bonus?Near the beginning of the year. It has to be done after Q4 and annual results get announced.QuoteYou say that the first year, you will get like 50% bonus (or something like that, depends on who you ask), but if you do a better job than those who have worked at the company for 10 years or something, won't you get more bonus than they get, then?Unlikely. As a newbie, you just won't have the experience as someone that has been productively working for ten years, and so assuming that ten year veteran isn't deadwood, he or she is likely to be more productive than you.

QuoteOriginally posted by: amerikanExcept of the bonuses, are their (usually) any benefits too, like health care or something like that?There is a standard benefits package that most firms offer (dental, healthcare, vision, etc. etc.)QuoteMaybe the first year you should try to just be happy that you have a job, and then the second one begin to ask for more bonuses and stuff?The way that it works is that there is a formal process at which you have a chance to write a report saying what you've done this year. That's your chance to ask for more bonus. The report reads something like "Give me lots of money this year because I've...." and then you remove the first part of that sentence.Also the job of quant was invented in the early/mid-1990's, so no one knows what the career progression will be like.

Okey, that's interesting, I thought it had existed for a longer time, as quantitative finance is older than that. But what about a trader, a financial engineer or something else like that, what do they earn the year before they retire?

QuoteOriginally posted by: amerikanOkey, that's interesting, I thought it had existed for a longer time, as quantitative finance is older than that. But what about a trader, a financial engineer or something else like that, what do they earn the year before they retire?either a lot or zero depending on whether you retire or get retired.